Professional Documents
Culture Documents
1.1
Organisational structures
1.2
1.3
Main features
Centralised Organised around owner Small companies or small companies in early stages of development
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.4
Advantages
Owner controls early growth and development of the business
1.5
Disadvantages
Owner may lack specialist knowledge in some areas Appropriate up to a certain size only
1.6
Organisational structures
1.7
1.8
Main features
Centralised Small company producing limited range of products Organised around tasks to be carried out
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.9
Advantages
Simple lines of control Efficient lines of communication and information flow vertical and short
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.10
Advantages (cont.)
Specialist managers heading up each function Improved decision making
1.11
Disadvantages
Functional managers overburdened with operational duties Longer-term planning may be neglected
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.12
Disadvantages (cont.)
Becomes stretched by growth and product diversification Difficult to co-ordinate and manage across different functions
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.13
Organisational structures
1.14
1.15
Main features
Product or geographical divisions Diverse range of products or services offered, or geographically-diverse markets served
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.16
Advantages
Divisions are profit centres in their own right Decentralised structure - easier to manage diversity Divisional managers responsible for short-term and medium-term planning
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.17
Advantages (cont.)
Top managers are free to concentrate on longer-term planning Profitability is spread across the divisions, products and markets
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.18
Disadvantages
Potential conflict between divisions over resource allocation Overall co-ordination of divisions can be difficult
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.19
Organisational structures
1.20
1.21
Main features
Small head office - acts as an investment company Decentralised - operating companies are largely independent
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.22
1.23
1.24
Advantages
Low central overheads Risk and profit are spread Ease of divestment of operating companies
1.25
Disadvantages
Individual operating companies under risk of divestment by holding or parent company - may feel threatened No centralised skills
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.26
Disadvantages (cont.)
Potential lack of overall co-ordination and direction of the whole organisation
1.27
Organisational structures
1.28
1.29
Main features
Double definition of profit centres (two arms of the matrix) Found in different types of organisation:
- large multinationals - university departments - sophisticated service companies
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.30
Advantages
Decentralised and localised decision making in the matrix Growth and complexity controlled by people in the matrix
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.31
Advantages
Direct contact between two arms of the matrix replaces bureaucracy Quality decision making and increased managerial motivation
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.32
Disadvantages
In the matrix, potentially: - a high degree of conflict - a long time to make decisions - unclear job and task responsibilities
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.33
Disadvantages (cont.)
Difficult to implement High overhead costs
1.34
Handys cultures
The power culture The role culture The task culture The person culture
Capon: Understanding Organisational Context 2nd edition Pearson Education 2004
1.35
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